Sat, Jan 21, 2006 - Page 10 News List

Drop in bonuses blamed on pensions

MONEY FOR NOTHING While the average annual bonus this year will be less than a month and a half's salary, traditional manufacturers are promising some serious payouts


Local businesses are to award an average of 1.48 months' salary as year-end bonuses to their employees this year, about one-third of a month's salary less than last year, mainly because of extra costs incurred from the new pension fund rule, according to a survey released by 1111 Job Bank (1111人力銀行) yesterday.

"The slight drop in year-end bonuses this year has to do with the weaker economy last year compared with 2004," Ryan Wu (吳睿穎), spokesman for 1111 Job Bank, told a press conference yesterday.

"But the new pension fund measure, which added to employers expenditure, has especially affected their willingness to award bigger bonuses," Wu said.

Under the new law, companies in Taiwan are required to set aside 6 percent of an employee's salary every month toward their pension fund.

About 5 percent of companies polled said that instead of year-end bonuses, they would offer a small amount of cash in a traditional Lunar New Year red envelope, gift coupons or a free outing for employees.

However, people who work for foreign companies in Taiwan can look forward to an average year-end bonus of 3.07 months' salary, the survey showed.

The traditional manufacturing sector, which enjoyed a bumper year on the back of soaring prices and demand for raw materials, offers the highest bonuses this year.

Formosa Plastics Group (台塑集團), for example, plans to give 5.5 months' salary, and Far Eastern Textile Ltd (遠東紡織), will issue up to 4.5 months' salary, the poll said.

The finance, securities and insurance sector, which provided the highest bonuses last year, fell to the No. 2 spot this year.

Shin Kong Financial Holding Co (新光金控) said that it plans to offer five months' salary, and SinoPac Financial Holding Co (建華金控) would give two months' salary.

Employees in the information-technology industry, which paid seven-figure bonuses in the sector's heyday, may be disappointed this year.

According to the poll, Taiwan Semiconductor Manufacturing Co (台積電), the world's largest made-to-order chip supplier, will grant just two months' salary this year.

Other sectors, including the import-export, publishing, retail, service and transportation industries, will issue between one and two months' salary as year-end bonuses, according to the job bank.

The job bank conducted the survey by polling companies via the Internet from Jan. 3 to Jan. 17. A total of 398 valid responses were received.

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